World Bank cuts east Asia, pacific's GDP forecast to 7.6%

World Bank (WB) on Wednesday forecasted the gross domestic product (GDP) growth rate in East Asia and Pacific of about 7.6 percent this year, lower than November's estimates of 7.8 percent, according to its latest review of the region's economy. The growth rate in 2011 is about 8.2 percent, a sharp decline from the nearly 10 percent in 2010. Although the countries in this region performed better than the developing country average world- wide, the global slowdown will still hit their external trade. " The region needs to reduce its reliance on exports and find new sources of growth," says the WB. The WB attributes the slowdown in 2011 to "lower-than-expected growth in manufacturing exports and supply disruptions in the wake of the Japan earthquake and tsunami and the severe flooding in Thailand." Earlier statistics on Monday showed that Thailand's economy expanded in the first quarter with GDP growth of 0.3 percent, reversing the contraction of 8.9 percent in the previous quarter, which will help hedge the "faster than anticipated slowdown in China" during this year, said the WB report. The WB also released their predict for China's economy performance in 2012, a growth of 8.2 percent, 2 percentage lower than that released half a year ago. Domestic demand will contribute most to growth in 2012, while consumption growth slows slightly and investment growth sharply slows down, mainly because of the ongoing housing regulations. Still, China's external trade will also be deeply affected by the uncertainty of sovereign debt in euro zone and economy slowdown of the US.